ISET

ISET Economist Blog

A blog about economics in the South Caucasus.
Feb
15

Is Some Degree of Corruption Good for Growth? – It Could Be.

It is a commonly accepted view that corruption is bad for economic growth. It leads to an inefficient allocation of resources by contradicting the rules of fair competition and by setting wrong incentives. Patronage and bribery are two components that define the notion of corruption and which cause the inefficiencies associated with it. Patronage often leads to the unfair delegation of the power of decision making to economic agents who do not posess the relevant skills to make good decisions. In the absence of patronage, ceteris paribus, the power of de...
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Guest — Nino
The last part about the region reminds me of the prisoners' dilemma __ if everybody else is corrupt, maybe it is better to be corr... Read More
Friday, 15 February 2013 10:10 AM
Guest — Florian
Is it prohibited for Georgian entrepreneurs to pay bribes abroad? Georgia should reconsider that rule. Until a few years ago, Germ... Read More
Friday, 15 February 2013 2:02 PM
Guest — Eric
Giorgi,I agree with the discussion in your blog up to the point where you make the link to Georgia. The thumb rule provided by Hec... Read More
Friday, 15 February 2013 4:04 PM
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Jan
31

Can Big Business Gain Access to Cheap Electricity?

Can Georgia stimulate investment in electricity intensive sectors by providing cheap electricity? To answer this question one has to first analyse the behavior of the wholesale electricity market during the past 3 years. According to the order of the Georgian Ministry of Energy on the “Electricity (Capacity) Market Rules”, a “Direct Customer” (or one who buys electricity wholesale) is someone who, for their own needs, consumes 7 million kWh of electricity per year (As this amount is approved with basic directions of the state policy in the Energy Sector)...
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Dec
19

Detecting Tourism Bottlenecks

Travel and Tourism Competitiveness Index of UN (T&T CI) ranked Georgia 73, in 2011. With this rank, Georgia topped South Caucasus region nevertheless, maintaining the same rank as in 2009. This could mean that not much had improved during those three years in terms of competitiveness of Georgia as a brand in the business of tourism. Looking at the data on international tourist arrivals and international tourism receipts – they both have been steadily increasing since 2000. From the first glance this upward trend seems promising. We have more tourist...
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Guest — Leqso
Indeed, expensive flight tickets are one of the key challenges for Georgian tourism industry, however bearing in mind that only sm... Read More
Thursday, 20 December 2012 11:11 AM
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Dec
17

Touristic Destination or Trade Corridor?

Georgia’s competitiveness is said to hinge on its strategic location between East and West. The latest data on border crossings (by people and trucks) allow to shed light on progress to date and take a glimpse into the future. The efforts to develop Georgia as a major touristic destination in recent years seem to have paid off. The number of international arrivals to Georgia has been growing rapidly, reaching 2,822,363 in 2011. In the first 11 months of 2012, the number of visitors exceeded 4mln, which is 58% more than in the same period of 2011. Interna...
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Dec
14

Rule of Law and Property Rights, the Economics Perspective

“Don’t rush to judgment on Georgia” was the title of a recent article by Michael Cecire in Foreign Policy (FP). Written in an apparent reaction to “Georgian Dream shows its dark side” (FP, November 29), and “Georgia’s government takes a wrong turn” (Washington Post, November 28), Cecire’s piece attempts to provide a more objective account of the situation. According to Cecire, “the Western outcry has been much too hasty. Ultimately, it's not the arrests [of senior UNM officials] themselves that will test the new government's commitment to democratic idea...
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Guest — Nodar
Dear Eric, I think your article is marvelous! But I have lived for 15 years in Romania and I believe situation is quite different ... Read More
Friday, 21 December 2012 8:08 PM
Guest — Investing in Georgia: An Emerging Economy? | The Business Strategy Blog
[...] I’m looking into both of these investments at the moment. Fascinatingly an ROI of 20% doesn’t attract local investors as the... Read More
Saturday, 29 December 2012 6:06 PM
Guest — Florian
A strong article, but I think that the conclusions derived from the data on interest rates are somewhat speculative. In the articl... Read More
Saturday, 29 December 2012 10:10 PM
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Nov
26

Agricultural Productivity in Georgia and Armenia, a Sequel

In his blog post “The puzzle of agricultural productivity in Georgia and Armenia” , Adam Pellillo raises the following question:  Georgia seems to be the only former Soviet republic in which agricultural productivity hasn’t returned to or exceeded its level in 1992. As of 2010, agricultural productivity stood at only 77 percent of where it was at nearly two decades ago. Why hasn’t agricultural productivity improved in Georgia over the past two decades, while it has at least recovered in every other former Soviet republic? It is even more p...
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Guest — Giorgi
My father has a farm service center and mechanization service center in Shida Kartli Region (Kaspi District). He provides agricult... Read More
Monday, 26 November 2012 3:03 PM
Guest — Simon Appleby
It is worth looking at houshold incomes in Marneuli also, a district with an Azeri-majority population.
Monday, 26 November 2012 6:06 PM
Guest — Eric
Seems like Kvemo Kartli to which Marneuli belongs is quite low on income per household. Local households report a very high portio... Read More
Monday, 26 November 2012 8:08 PM
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